Kakao Q2 Net Profit Drops 44% on Increased Costs


Kakao Corp., the operator of South Korea’s top mobile messenger, reported on Thursday that its second-quarter net profit dropped 44% from the same period a year ago due to increased costs and investments. The company’s net profit reached 56.3 billion won (US$43.3 million) in the April-June period, while its operating profit declined 33.7 percent from a year ago to 113.5 billion won, and sales rose 12.1 percent to 2.04 trillion won. Operating costs climbed 17 percent on-year to 1.92 trillion won due to increased investments in artificial intelligence, health care and data center facilities. Kakao said it will try to enhance investment efficiency and continue to adjust investment strategies to maintain financial soundness. Its content business accounted for 52 percent of the second-quarter sales, while the rest came from its platform business. The number of monthly active users of KakaoTalk, its flagship mobile messenger, came to 48.2 million as of the end of the second quarter, up 703,000 from a year ago. Kakao CEO Hong Eun-taek said the company planned to unveil a “cost-effective hyperscale AI” model after October, which it will use for various business activities on KakaoTalk.

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